What is the process of determining the value of real property referred to as?

The process of determining the value of real property is referred to as valuation. Valuation involves a systematic approach to assessing the worth of a property based on various factors, such as location, condition, comparable properties, market trends, and potential for future appreciation. This process is critical in real estate transactions, appraisals, and investment analyses, as it provides an objective figure that can guide pricing decisions, facilitate negotiations, and inform lending practices.

While some related terms might be used interchangeably in casual conversation, they hold distinct meanings in the real estate context. For example, assessment typically refers to the process used by government entities to determine property taxes, which may not accurately reflect current market value. Evaluation can sometimes imply a less rigorous or formal approach and might focus more on qualitative aspects rather than establishing a numerical value. Pricing usually refers to setting a sale price based on various factors, including evaluation and current market conditions, but it does not specifically address the detailed and methodical process of determining real property value itself. Thus, valuation is the precise term that captures the essence of this comprehensive assessment process.